If buying Life Insurance for your child, how does it protect that child?

Question

This seems ironic for me?

I saw a commercial that offers Life Insurance for your child. The price is cheap. Anywhere from $1.00 a month to $5.00 a month.

If your child dies, then the beneficiary will recieve a lump sum, like $$50,000.00. So where does the protection for that child take play? In all respect, the child is dead and doesn't need cash, and the beneficiary becomes richer.

Yeah, it will help pay for funeral costs, but at a time of grieving, funeral costs are not important. People manage to get the money regardless.

Answer 1

Health Insurance is to help protect your child by paying for the medical expenses.
As far as life insurance goes, it will help pay for the funeral. Funerals are very expensive. Some people can't afford a lump sum payment.

Answer 2

You can take life insurance out on him without his permission. Since you are his wife you have an insurable interest in his living. He can be ordered by a court to complete any physical requirements on the policy and answer any health questions that may be required. But I agree with an earlier commenter, you need to get marriage counseling.

Answer 3

As an insurance advisor I typically advise people to only buy insurance on a child after the families other many needs are protected. Including the parents being adequately insured, an emergency fund established, retirement and savings plans in place. The death of a child while devastating would not typically but a family in financial jeopardy. Life insurance is not typically a good tool for college savings due to its low return on investment. There are several better methods including 529 college savings plans. The one really good thing that comes of insuring a younger child can be to preserve that childs insurability. Buying a policy on a young healthy child, can make sure the child has some life insurance during their lifetime regardless of any changes in their medical condition or health changes.

Answer 4

Life insurance never protects the insured. It protects those who depend on the insureds income. In the case of a child, it doesn't actually protect anyone.

Answer 5

What do you think life insurance is for? Not for the child.

Answer 6

You are basically correct, it doesn't much protect the child. However, if that plan is whole life, the policy can be paid off and be borrowed against by the insured when he/she gets older. Also, it might, as most do, protect from loss of limb, in which a person does not have to die. If the policy is whole life and the person reached adulthood and marries and has a family, the family has protection against mounting bills that the family may be liable for. You must take a good look at the policy, and in all honesty, if you manage your child's money and contribute to a tax free fund for him/her, you are better off. If you cannot manage to save on your own, maybe a policy is a good thing, because it comes as a "bill" for the premiums, forcing a parent to pay it. Get some smarts, and invest in your child's future on your own, as the payout is way greater.

Answer 7

Yes, that is the nature of all life insurance. It does not matter if it is for a child or an adult.

We all die.

Life insurance is the only type of insurance for something that will always happen. Other types of insurance are for things that might happen.

If you die and are resuscitated, can your beneficiary collect your life insurance?

Answer 8

It doesn't protect your child AT ALL. It just provides some funeral costs. And you could buy term coverage much, much cheaper. Maybe $50 a year for $250,000 coverage.

Answer 9

You paid the cost of a funeral lately.
I have. Over $8000.00.
I really could have used $50,000.
It still would not pay medical bills outstanding stilll. Mother was 90. You try getting insurance at age 55 or older and see your payments. Fifthy years ago $5000.00 was a lot of money.

20 years from now even $50,000 probably won't pay for burial.

It does protect the child in many ways.
It ensures proper burial- You might spend every time you have on medical bills prior to death.
Also most policies have an annunity-cash amounts.
Also that policy guarantees that child will have insurance coverage in case the child can't get coverage at an older age due to health problems or you get buried.

Insurance protects all concerned.
Some policies allow you to draw up to 80% of face coverage in advance in event of serious illness likely resulting in death.
Might even save your home and provide a place for that child to stay. Children die daily-sad as it is.

Answer 10

$50, 000 is an excessive amount on a child with no debt, however if this is a college age student, and they have student loans, this is not an unreasonable amount.

But for your typical 5yr old, $15,000 is probably more appropriate. This type of term life policy is very inexpensive because the risk to the insurance company is practically nil.

However, take into account what will happen if your son or daughter dies. In your emotional distress you will be put into the position of disposing of their body according to your cultural standards. This is an amount that would allow for you to not be in your right mind when you are making horrible choices of service, casket and burial plot. Typical funerals may cost less than this, but someone please tell me what is "typical" about the death of your child?

Insurance is for the living, buts it meant to pay bills and settle estates, not be a money maker. Any insurance agent that tries to sell you something so excessive for a child is simply padding their commission, unless they can prove why you would need such a high amount.